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Reviewing a Salary Structure: Compensation

Analyze the advantages and disadvantages of broadbanding as a compensation plan. Conclude with a position stating whether you think broadbanding can be successfully competitive any working environment.

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Broadbanded Compensation plans were popular in the 1990s. These plans were movement away from compensation programs that included many narrow pay grades. Broadbanded compensation plans were meant to replace narrow or single graded Plans. Broadbanding simply means that the number of pay grades is compressed into a smaller number of wider bands. Compensation, is therefore is managed more flexibly and more attention is paid to market analysis and employee retention.

Companies thought use of broadbanding would have certain advantages:
- Companies thought it could simplify their compensation process. Fewer grades would translate to cost savings in job evaluations justifying grade placement decisions.
- Fewer grades would facilitate transferring people between jobs since they would be less likely to view the transfer as a demotion (instead of going from grade X to grade Y, the move is within a band). This is particularly helpful in times of ...

Solution Summary

This solution is a review of the concept of broadbanding and reflects on whether broadbanding is effective in the competitive workforce.